Where would one go to get the definition of a "review appraisal?"

We've got a loan officer who recently had a review appraisal done. The appraiser who conducted the review would not state whether or not the value stated was valid, or otherwise, stating that if he did, then he would be conducting a full appraisal.

So, I guess I need some clear definition on what each type of appraisal is.

What kind of review did they perform if they won't issue an opinion on whether they agree with the market value or not? They need to review the USPAP.

Get a new appraiser lined up that knows what they are talking about and get your money back from this one.

It is very acceptable for the reviewer to not issue an opinion as to his/her agreement with the value. Please refer to Advisory Opinion 20 on page 196 of the 2005 USPAP. Many reviews are conducted for the purpose of the reviewer concluding that the value opinion is adequately supported. This is not the same as actually concuring with the value. If the reviewer provides an opinion to value, he/she must essentially provide a summary appraisal to support the value conclusion(must be prepared under Standards 1, 2, & 3). Many banks don't want to pay the fee associated with having a "value opinion" review.

I agree with Anon. Generally, a review appraisal simply states that the appraisal either complies with FIRREA or it does not. Observations may be made, but an agreement with value is not the purpose of the review.

This is actually true, but it really boils down to the engagement letter that was provided to the appraiser and what was agreed upon. A review appraisal could be just a review of process without an opinion of value, but if that was what was asked for and agreed upon, that should have been delivered. It sounded to me from the original post, they didn't get what they asked for.

For a complete copy of what Opinion 20 says - Opinion 20

From reading the first post, it appears that they simply ordered a review of an appraisal. Within the appraisal industry, this could be implied to mean that the appraisal is reviewed to be in compliance. But often banks will order a review with value opinion (often a much higher fee) if they do in fact want a value conclusion in the review. I think the poster may have failed to ask for what they really wanted.

yup - or like you said - didn't ask for what they really wanted.

IMHO - no appraisal or review appraisal should be contracted for without a specific engagement letter and the terminology in the letter should be reviewed with the terminology used in the USPAP to ensure that all parties are on equal footing.

That 'Opinion 20' was very helpful. Thank YOU. When you send off an appraisal for review do you black out the appraisers' name? Do you have to get permission from the appraiser to send his/her work to another appraiser for review? And one more question - when sending an engagement letter do you include 'Privacy Policy' info?

I don't black out the appraiser's name. In fact, I encourage the reviewer to call the appraiser and discuss any issues or questions that may arise as part of the review process. The reviewer is acting as an "agent" of the bank, so I don't foresee a reason why two professionals can't discuss the report. As for privacy issues, I send out master agreements with each of the appraisers on our panel at the beginning of each year. By them signing the agreement, it ackowledges that they will adhere to our policies on any assignment that may arise during the course of the year.

Can you please tell me what an engagement letter consists of and is it done on all loans that need an appraisal done regardless of loan amount? Thanks